Corporate dollar deposits hit record high as Korean won strengthens

Corporate dollar deposits at major South Korean banks have risen to a record high this month, as the won-dollar exchange rate fell to its lowest level in almost two years, industry data showed on Sunday.

The outstanding dollar deposits at five major local banks stood at US$76.98 billion as of Thursday, the highest level since banks began compiling such data in May 2021.

The five banks are KB Kookmin, Shinhan, Hana, Woori and NH NongHyup, reports Yonhap news agency.

The Korean won was quoted at 1,345 won per dollar as of 10:30 p.m. Friday, the highest level since Oct. 8, 2024, when the won traded at 1,344.6 won against the greenback.

The won-dollar exchange rate has risen by 254.2 won from an all-time low of 1,588.2 won per dollar recorded on July 1.

"Dollar deposits are growing as export proceeds come in, while exporters delay exchanging them to the Korean won. Import companies are also actively buying the U.S. dollar in installments," Baek Seok-hyun, an economist at Shinhan Bank's S&T Center, said.

Demand to exchange the won into the dollar is also growing.

A total of $60 million was exchanged from the Korean won to the U.S .dollar in the first three days of this month at the five banks.

The monthly exchanged amount had sharply declined from $275 million in February to $164 million in June before rebounding to $349 million the following month, the data showed.

"Individuals are buying dollars since the won-dollar exchange rate fell in July and August. Demand for the dollar to invest in U.S. stocks has also risen," an official from NH NongHyup bank said.

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